Agree, this feature is heavily underused atm, almost all the communities we host do not pre-moderate. It places a huge barrier in front of users and flagging usually takes care of it less obtrusively.
If we are going to invest any time here we should first make it so the experience of the person being pre-moderated is a lot better.
After you post a pre-moderated post, you can not “tell” you have one going on the topic (no breadcrumb saying you have a post pending). You can not edit your response for typos or withdraw it. I feel this is far more important to tackle first.